Working Paper: CEPR ID: DP8266
Authors: Luca Anderlini; Leonardo Felli; Alessandro Riboni
Abstract: All Courts rule ex-post, after most economic decisions are sunk. This might generate a time-inconsistency problem. From an ex-ante perspective, Courts will have the (ex-post) temptation to be excessively lenient. This observation is at the root of the principle of stare decisis. Stare decisis forces Courts to weigh the benefits of leniency towards the current parties against the beneficial effects that tougher decisions have on future ones. We study these dynamics and find that stare decisis guarantees that precedents evolve towards ex-ante efficient decisions, thus alleviating the Courts? time-inconsistency problem. However, the dynamics do not converge to full efficiency
Keywords: Case Law; Precedents; Stare Decisis; Time Inconsistency
JEL Codes: C79; D74; D89; K40; L14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| stare decisis (K36) | judicial decisions (K41) |
| judicial decisions (K41) | future rulings (K41) |
| judicial discretion (K41) | lenient decisions (K40) |
| lenient decisions (K40) | inefficiencies (D61) |
| stare decisis (K36) | long-term efficiency (D61) |
| stare decisis (K36) | tougher rulings (K40) |
| stare decisis (K36) | evolution of precedents (B15) |
| evolution of precedents (B15) | ex ante efficient decisions (D61) |